KOLKATA: Prices of televisions, refrigerators and air-conditioners are set to go up by 4-5% from July with the goods and services tax (GST) council proposing 28% GST on consumer electronics and durables as compared to the current tax rate which is around 23%.

The companies said they will pass on the additional tax burden to consumers which may lead to a temporary impact on demand.

“With the 4-5% price hike, there will be an impact on sales in July-August but we expect the effect will get neutralised by the festive season and demand will be back,” said Panasonic India president Manish Sharma.

Videocon’s chief operating officer CM Singh said though some consumers may now prepone their purchases before July, it is unlikely to compensate for the loss of business after GST is implemented.

Sharma said the trade partners might have slight impact due to input tax, however they could recover by increase in their selling price. "We shall not be giving any incentive for inventory adjustments to trade partners," he said.

At present, consumer durables attract VAT which varies from 12.5% to 14.5% depending on the state and around 8.6% excise duty including the cesses. The industry was lobbying for 18% tax slab under GST.

French small appliance maker Groupe SEB India CEO Sunil Wadhwa said the 28% tax rate on products like electric iron, juicers and mixer-grinder is one of the highest in the world.

“A large percentage of appliances are made in excise-free zones. At present, we have no clarity on how the present excise exemption will work, post GST. There are also going to be multiple costs associated with old stocks, compliances and increased cash flow requirements,” he said.